AAFX TRADING

Daily Market Lookup

  • The post-Christmas rally in global equities took a break on Thursday in Asia in the absence of any concrete details on U.S.-China trade negotiations. The yen and Treasuries ticked higher. Stocks fell in Japan and futures pointed to lower starts in the U.S. and Europe, while Chinese equities fluctuated. The offshore yuan climbed to the strongest since August as the U.S. and China laid the ground for resolving trade issues, though S&P 500 Index contracts declined as some investors expressed disappointment at negotiations that seem likely to continue indefinitely. The dollar was steady and crude pulled back after climbing above $52 a barrel and entering a bull market. Global stocks have rallied since the start of the year amid optimism tensions are thawing between the U.S. and China on trade and commentary from the Federal Reserve showed policy makers have shifted to a more cautious approach to further interest-rate increases. Still, concern surrounding the partial U.S. government shutdown continues to weigh on sentiment ahead of earnings season. And China inflation data on Thursday showcased slowing growth in the world’s No. 2 economy. Meanwhile, the U.S. government shutdown is dragging on. President Donald Trump said his party was “very unified” behind his plan to keep the government closed until he gets funding to build a wall along the Mexican border, which is at the center of the dispute. He then walked out of a meeting with Democratic congressional leaders Nancy Pelosi and Charles Schumer, calling it a “total waste of time.” Here are some events investors may focus on this week:
    • Fed Chairman Powell will speak to the Economic Club of Washington D.C. on Thursday.
    • Britain’s Parliament resumes a debate on the Brexit withdrawal bill, with Prime Minister Theresa May seeking to avoid defeat in a vote set for the week of Jan. 14.
  • The U.S. dollar slipped on Thursday in Asia after the Federal Reserve indicated in the minutes of its December meeting that it was willing to hold off on rate hikes amid concerns about global growth and subdued inflation. Fed members indicated they could afford to be "patient" about future rate hikes, citing a list of concerns including volatility in financial markets, slowing global growth and muted inflation pressures. China’s Commerce Ministry said in a Thursday morning statement the trade talks with the U.S. that ended yesterday were extensive and detailed, and that both sides agreed to continue to keep in close contact. The U.S. side also issued a statement earlier in the day. According to the report, China had pledged to purchase "a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.” The producer price index and the consumer price index took centre stage as they both grew less than expected in December, official data showed on Thursday in Asia. The producer price index in December, which measures price increases before they reach the consumer, was up 0.9% from a year ago, lower than the expected 1.6%, according to the latest data published by the National Bureau of Statistics. Factory prices have now decelerated for six months in a row, the South China Morning Post reported. The dollar was under pressure early on Thursday on growing expectations the Federal Reserve will pause its rate tightening cycle this year, while optimism about the Sino-U.S. trade talks reduced demand for safe-haven assets. Minutes from the Fed's Dec.18-19 meeting revealed that several policymakers were in favor of the US central bank keeping rates steady this year. Broader market sentiment was also bolstered in early Asian trade amid signs of progress in U.S.-China trade talks. Trade tensions between the world's two largest economies had rattled markets for most of last year. The dollar had gained 4.3% in 2018 as the Fed hiked rates four times on the back of a strong domestic economy, falling unemployment and rising wage pressures. Economic data in the eurozone has remained consistently weaker than estimates over the last few months, especially in France and Germany, the eurozone's economic powerhouses. The ECB is widely expected to remain accommodative in 2019, which should keep a lid on the single currency.
  • Oil prices slid and gave back some of their gains after jumping more than 5% on Wednesday amid optimism on Sino-U.S. trade talks. The rally came as China said trade talks with the U.S. were “extensive and detailed,” and that both sides agreed to continue to keep in close contact. Meanwhile, reports that OPEC kingpin Saudi Arabia has vowed to “stabilise” the market also provided support for oil prices. Saudi Energy Minister Khalid al-Falih said actions taking by the OPEC+ alliance were starting to bring the market back after a near-40% drop from 2018 highs. Falih said the kingdom was pumping about 800K barrels less a day from the record high of 10.2 mn bpd in November. On the other hand, the U.S. Energy Information Administration said that crude inventories fell by 1.68 million barrels for the week ended Jan 4., about a third less than the 2.4 mn-barrel draw forecasted by analysts. The report was cited as a headwind for oil prices today. On the products side, gasoline inventories rose by 8.07 min barrels, more than double the expected build of 3.39 mn barrels. They were also 8% above the 5-year average, the EIA said.

 

 
Intraday RESISTANCE LEVELS
10th January 2019 R1 R2 R3
GOLD-XAU 1,300-1,309 1,315 1,322
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 52.70-53.50 54.00 54.60
EURO/USD 1.1590-1.1620 1.1660 1.1700
GBP/USD 1.2800 1.2850 1.2895-1.2940
USD/JPY 109.10 109.60-110.20 111.00

Intraday SUPPORTS LEVELS
10th January 2019 S1 S2 S3
GOLD-XAU 1.289-1,282 1,274 1,266-1,260
Silver-XAG 15.60-15.40 15.10 14.90-14.75
Crude Oil 51.70-51.00 50.20 49.50-49.00
EURO/USD 1.1560-1.1490 1.1460 1.1420-1.1390
GBP/USD 1.2760-1.2700 1.2660 1.2800
USD/JPY 108.50-108.10 107.50 107.05-106.60

Intra-Day Strategy (10th January 2019)
GOLD-XAU Buy on Dips
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1293.80/oz and low of US$1280.05/oz. Gold up by 0.615% at US$1292.87/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1251) and breakage below will call for 1246-1236. MACD is above zero line and histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1289-1260 with risk below 1260, targeting 1300-1309 and 1315-1324. Sell below 1300-1324 keeping stop loss closing above 1324, targeting 1289-1284-1274 and 1266-1260.

 
Intraday Support Levels
S1     1.289-1,282
S2     1,274
S3     1,266-1,260
Intraday Resistance Levels
R1     1,300-1,309
R2     1,315
R3     1,322

Technical Indicators

Name   Value Action
14DRSI  

70.771

Buy
20-DMA   1268.79 Buy
50-DMA  

1242.45

Buy
100-DMA   1224.17 Buy
200-DMA   1249.29 Sell
STOCH(5,3)   66.971 Sell
MACD(12,26,9)   15.383 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.76/oz and low of US$15.56/oz. Silver settled up by 0.511% at US$15.72/oz.

Technicals in Focus:

On daily charts, silver is sustaining above100DMA (14.50), breakage below will lead to 14.30-13.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 15.60-14.75 targeting 15.80-16.00 and 16.40-16.80-17.00.; stop breakage below 14.75. Sell below 15.80-17.00 with stop loss above 17.00; targeting 15.60-15.10-14.90 and 14.75 14.40.

 
Intraday  Support Levels
S1     15.60-15.40
S2     15.10
S3     14.90-14.75

Intraday  Resistance Levels
R1     15.80-16.00
R2     16.40
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.66 Buy
20-DMA   15.12 Buy
50-DMA   14.67 Buy
100-DMA   14.56 Buy
200-DMA   15.34 Sell
STOCH(5,3)   61.852 Sell
MACD(12,26,9)   0.328 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$52.75/bbl, intraday low of US$49.92/bbl and settled up by 4.88% to close at US$52.37/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 66.10 which is a resistance level and breakage above will call for 66.80-67.08. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 52.70-53.50 with stop loss at 53.50; targeting 51.70-51.00-50.20 and 49.50-49.00-48.50. Buy above 51.70-49.00 with risk daily closing below 49.00 and targeting 52.70-53.50 and 54.00-54.60.

 
Intraday Support Levels
S1     51.70-51.00
S2     50.20
S3     49.50-49.00

Intraday Resistance Levels
R1     52.70-53.50
R2     54.00
R3     54.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.709 Sell
20-DMA   48.05 Sell
50-DMA   52.99 Sell
100-DMA   61.57 Sell
200-DMA   64.82 Sell
STOCH(5,3)   91.750 Buy
MACD(12,26,9)   -1.085 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1436/EUR, high of US$1.1557/EUR and settled the day up by 0.891% to close at US$1.1541/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1480), which become immediate resistance level, break below will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy:

Buy above 1.1560-1.1390 with risk below 1.1390, targeting 1.1590-1.1620 and 1.1660-1.1700. Sell below 1.1590-1.1700 targeting 1.560-1.1490-1.1460 and 1.1390-1.1345 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1560-1.1490
S2     1.1460
S3     1.1420-1.1390

Intraday  Resistance Levels
R1     1.1590-1.1620
R2     1.1660
R3     1.1700

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.6900 Buy
20-DMA   1.1408 Buy
50-DMA   1.1376 Sell
100-DMA   1.1478 Sell
200-DMA   1.1636 Sell
STOCH(5,3)   88.561 Sell
MACD(12,26,9)   0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2706/GBP, high of US$1.2802/GBP and settled the day up by 6.874% to close at US$1.2787/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy:

Based on the charts and explanations above; sell below 1.2760-1.2940 with targets at 1.2700-1.2660 and 1.2600-1.2550. Buy above 1.2700-1.2490 with targets 1.2760-1.2800-1.2850 and 1.2900-1.2940 with stop loss closing below 1.2490.

 
Intraday Support Levels
S1     1.2760-1.2700
S2     1.2660
S3     1.2800

Intraday Resistance Levels
R1     1.2800
R2     1.2850
R3     1.2895-1.2940

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.519

Buy
20-DMA   1.2670 Sell
50-DMA   1.2771 Sell
100-DMA   1.2893 Sell
200-DMA   1.3137 Sell
STOCH(5,3)   88.636 Sell
MACD(12,26,9)   -0.0029 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY107.96/USD and made an intraday high of JPY108.99/USD and settled the day down by 0.505% at JPY108.16/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to buy as it has given positive crossover to confirm bullish stance.

Trading Strategy:

Sell below 109.10-111.00 with risk above 111.00 targeting 108.50-108.10 and 107.70-107.05-106.60. Long positions above 108.50-106.60 with targets of 109.10-109.60 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     108.50-108.10
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     109.10
R2     109.60-110.20
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.168 Buy
20-DMA   111.13 Sell
50-DMA   112.39 Sell
100-DMA   112.25 Sell
200-DMA   112.08 Buy
STOCH(9,6)   72.250 Buy
MACD(12,26,9)   -1.171 Sell

AAFX TRADING
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